USING THREAT OF GSP REVIEW TO PREPARE FOR CAFTA

UNCLAS SECTION 01 OF 02 GUATEMALA 000137

SIPDIS

SENSITIVE

STATE FOR DRL/IL:GEORGE WHITE AND WHA/PPC:CHARLOTTE ROE
USTR FOR ANDREA DURKIN AND BUD CLATANOFF
DEPT OF LABOR FOR ILAB: ROBERT WHOLEY

E.O. 12958: N/A
TAGS: ETRD PHUM PGOV ELAB PREL GT
SUBJECT: USING THREAT OF GSP REVIEW TO PREPARE FOR CAFTA



1. (SBU) Summary: Pending further steps from the GOG to
protect labor rights, Embassy recommends that USTR inform the
Guatemalan Embassy in Washington (and the Department instruct
us to inform the GOG here) that the GSP petition is under
informal USG review pending an assessment of current GOG
efforts in three areas. We believe that doing so could lead
to progress in: bringing overdue criminal prosecutions to
court; streamlining the labor justice system; and reinstating
illegally fired workers. End Summary.

Background
--------------


2. (SBU) On December 2, the AFL-CIO filed a petition with
USTR to withdraw GSP benefits from Guatemala due to lack of
compliance with labor rights conditions. The International
Labor Rights Fund also submitted petitions against Guatemala
and El Salvador. We have reviewed the AFL-CIO petition, but
not that of the ILRF.


3. (SBU) Guatemala has been reviewed many times over past
decades, but has never lost GSP benefits. This review would
be the first since USTR announced in May 2001 suspension of
review of Guatemala in the wake of passage of major Labor
Code reforms and sentencing of labor violators in the SITRABI
trial. At that time and since, the USG has repeatedly
expressed concern that the revised labor code be effectively
enforced.


4. (SBU) The standard for labor rights compliance with GSP
is broad and low (i.e. for the GOG to be "taking steps" to
afford its workers their internationally recognized labor
rights). Thus Guatemala's immediate problem is less the
massive labor violations that occur every day than the
impunity that labor rights violators generally enjoy, despite
adequate protections in law. That impunity stems from a weak
labor justice system, a weak criminal justice system, and
weak labor code enforcement measures by the Executive. The
DYMEL case was a good example of this, until US interests
spurred us to take corrective action. The end result was a
happy exception to the rule that even if workers win in
court, labor violators can avoid justice.

The Petition
--------------


5. (SBU) The AFL-CIO petition is generally accurate
describing specific failures of the GOG to guarantee labor
rights. It describes many notable cases in which fundamental
labor rights, including the right to organize a union, have
been flagrantly violated by employers, who often dismiss
labor organizers in violation of labor code protections.
Labor courts often rule against employers (as in the DYMEL
case),but sentences are not enforced if employers refuse to
reinstate illegally fired workers.


6. (SBU) Even more serious are a series of unsolved murders
of labor leaders (the GSP petition mentions six since January
1999; MINUGUA cites four in the period 1/1/2000-9/15/02;
another murder occurred in late November, 2002). In response
to international criticism (from the ILO and under the GSP
process) the Public Ministry formed a new Special Prosecutor
for Crimes Against Unionists and Journalists in July 2001, to
centralize investigation of these cases. However, the
Special Prosecutor's Office suffers from the usual resource
constraints and is regarded as hostile to labor concerns by
unions. As of September 2002, the MP had issued only two
arrest warrants for 51 open cases.


7. (SBU) The petition also describes some cases which have
since been resolved to a certain extent or been addressed by
non-government actors:

-- Coca Cola's local bottler recently agreed to a collective
bargaining agreement with its union;

-- Jalapa municipal workers struck in 2002, but returned to
work after concessions from the mayor;

-- Choi Shin-Cimatextiles maquila has instituted regular
meetings with its unions, though nobody has been charged for
earlier violence there;

-- ILO/IPEC has announced a new project to combat child labor
in the Guatemala City municipal dump.


8. (SBU) Finally, the petition ignores positive GOG actions
(or "steps") on some fronts. In 2002, these positive actions
included the creation of a consensual National Plan for
Occupational Health and Safety in 2002, cooperation with the
ILO's International Program to Eliminate Child Labor in
several sectors of the economy, and the revitalization of the
Labor Ministry under a new labor minister, Victor Hugo Godoy.
Godoy took office in February 2002, has had some success
reforming his ministry internally, while maintaining good
relations with AID and the Embassy, and has moderated the
antagonism between his predecessor and the private sector.
Labor Ministry fines are up, (the total is more than 10 times
the total imposed by labor courts in the past 50 years,
according to Labor Minister Godoy) though they are lower than
permitted under the new labor code.


9. (SBU) In 2001, we used the pressure of formal GSP review
to support legislative changes to bring the Guatemalan labor
code in compliance with its ILO commitments. Though the
outcome was what the USG sought, it came at some political
cost. The resulting reforms gave the Labor Minister new
enforcement powers, which have not been forcefully exercised
since employers have recourse to the courts, but which
represent a real advance in the law. However, despite the
increase in fines cited by the minister, the situation facing
most Guatemalan workers who try to form unions is little
changed.

Recommendation
--------------


10. (SBU) Given this situation, Embassy wishes to encourage
further GOG remedial actions to protect labor rights. We
therefore recommend that USTR inform the Guatemalan Embassy
in Washington (and the Department instruct us to inform the
GOG here) that the GSP petition is under informal review
(i.e. that a formal USTR decision will be made after the
Embassy assesses GOG progress accomplishing the elements
outlined below).


A. Bring overdue criminal prosecutions to court and replace
Special Prosecutor:

We will suggest that the Attorney General replace the current
Special Prosecutor for Crimes Against Unionists, given the
latter's poor performance. As in other areas of law
enforcement interest, we will press for results on
outstanding criminal cases, particularly unsolved murders.
The AG will want resource support to accomplish this, and we
should consider that request when it comes. NAS is already
planning to donate used excess computer equipment from other
Public Ministry programs.


B. Streamline the labor justice system:

While the former minister introduced draft legislation to
speed labor enforcement, it has not been acted on by Congress
and is not supported by labor or employer groups. Instead, a
labor justice committee was formed by the GOG with UNDP
support and participation by judicial system and Executive
branch members, and civil society (labor and employer
groups). We should support this effort, and press for
concrete results (consensual administrative and legislative
changes to improve the labor justice system, including more
vigorous police enforcement of judicial sentences).


C. Reinstate illegally fired workers:

The AFL-CIO GSP petition cites the Finca Maria Lourdes case
as emblematic of the problems of reinstating workers fired
for attempting to organize a union on a traditional coffee
plantation. It also involves an affiliate of the labor
federation directly supported by the AFL-CIO. We will urge
that the GOG effect a resolution (through reinstatement or a
financial settlement of workers claims) of this case.
Hamilton